Couriers and Cleaners to be included in TPAR
Businesses in the Building and Construction industry need to report each year the total payments they make for services on the Taxable Payments Annual Report (TPAR). These businesses are required to report only payments that have been made to contractors for building and constructions services. Contractors can be sole traders (individuals), companies, partnerships or trusts.
These payments need to be reported to the ATO on the Taxable Payments Annual Report by 28 August each year.
On 7 February 2018, the Treasury Laws Amendment (Black Economy Taskforce Measures No.1) Bill 2018 was introduced to Parliament. This Bill proposes to extend the taxable payments reporting system to businesses in the Courier and Cleaning industries.
Draft Guidance - current to 02 March, 2018 - subject to the Bill being enacted
From 1 July 2018, if you are a business that provides courier or cleaning services you will need to report payments you make to contractors if:
the payments are for courier or cleaning services
you have an Australian business number (ABN).
Contractors can be sole traders (individuals), companies, partnerships or trusts.
Payments must be reported to the ATO each year using the Taxable Payments Annual Report.
Businesses that are required to report will need to collect the relevant information from 1 July 2018. The first annual report will be for the 2018-19 financial year and is due by 28 August 2019.
Work out if you need to report
If you're a business that provides courier services, you need to report payments you make to contractors that are wholly or partly for courier services.
Courier services include activities where items or goods are collected from, and/or delivered to, any place in Australia using a variety of methods including by car, truck, station wagon, van, ute, motorcycle, motorised scooter, drones, bicycle or other non-powered means of transport, or on foot.
Courier services are usually door-to-door services that are often used for specialty deliveries or for small parcels or packages. Goods commonly transported using courier services include parcels, packages, letters, and food.
Courier services do not include:
passenger transport services e.g. buses and taxis
‘freight transport’ means the transportation of bulk or large quantities of items, goods or commodities via rail, sea, air, or road (usually heavy vehicle trucks or larger vehicles) from one location to another.
If you're a business that provides cleaning services, you need to report payments you make wholly or partly to contractors for cleaning services.
Cleaning services include, but are not limited to, any of the following activities undertaken on a building, residence, structure, place, surface, transport/vehicle, industrial machinery or equipment and for events:
Exterior cleaning (except sand blasting)
Road sweeping and street cleaning
Swimming pool cleaning
Park and park facilities cleaning
Details you need to report
The details you need to report for each contractor include:
ABN (where known)
gross amount you paid for the financial year (this is the total amount paid including GST)
total GST included in the gross amount you paid.
Depending on whether you report using the paper form or electronically, the ATO may ask you to include additional information where it is known to you. This additional information includes the contractor’s phone number, email address and bank account details (where they are paid by electronic bank transfer)
You are required to report the total payments you make to contractors in the financial year in which the payments are actually made (cash basis).
The details you need to report are generally contained in the invoices you receive from the contractors you engage
Payments you don't need to report
There are specific payments you don’t report on the Taxable Payments Annual Report:
Payments for materials only
Unpaid invoices as at 30 June each year.
Pay as you go (PAYG) withholding payments, such as those you make to employees or under a voluntary agreement to withhold, as these amounts are reported in your PAYG withholding payment summary annual report. If amounts are withheld because a contractor did not quote an ABN, you can choose to include these payments in the PAYG withholding where ABN not quoted - annual report or the Taxable Payments Annual Report. Do not include these payments in both reports.
Payments within consolidated groups. If you’re in a consolidated, or multiple entry consolidated group for income tax purposes, you don’t need to report payments you make to another member of that same group. This is because members of a consolidated, or multiple entry consolidated, group are effectively taxed as a single entity. However, each entity in the group will need to consider if they are a business that provides courier or cleaning services, and report payments they make to contractors outside the consolidated group, for courier or cleaning services respectively. If so, they will need to lodge a Taxable Payments Annual Report.
Payments made by individuals for private or domestic reasons.
How to lodge your Taxable payments annual report
The first annual report for businesses that provide courier and cleaning services is due by 28 August 2019, for the year ending 30 June 2019.
As with all of our Building and Construction Clients, we can complete your report on your behalf. Once the bill has been enacted we will contact our clients in the Courier and Cleaning Industries to advise them what their new responsibilities entail.
If you would like to be included please contact our office on 07 5502 6673
Information sourced from www.ato.gov.au and https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6029